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It's past time to blunt the tax shock set to strike in January. According to the nonpartisan Congressional Budget Office, tax revenue in calendar 2013 will jump by nearly a half-trillion dollars, which comes to about 2.7% of nominal gross domestic product. There hasn't been a single year since 1970 when increases in federal tax revenue ran even as high as 1% of nominal GDP. But in 1969, the rise ran 2.1%, and by that year's fourth quarter, the U.S. was in recession.

Since I wrote about the tax shock last week ("Shock Treatment," Nov. 12), policy makers have held sit-downs, both formal and informal, to try to forestall it. With informal talks already under way between White House and congressional staff, President Obama held a meeting Friday, attended by congressional leaders, including Republican House Speaker John Boehner, from which nothing conclusive resulted. There were, however, postmeeting assurances that the talks had been "constructive." My colleague Jim McTague, in his column, seems confident that a deficit-reduction deal will be worked out early next year, preceded by passage of a measure this year to prevent our going over the cliff. But a true deficit-cutting plan could take longer.

Regardless of your view, you can't follow the game without a score card. Herewith, a summary of the main issues:

THE MEDIA SEEM TO BE SOWING CONFUSION about whether the talks are really about reducing the deficit, or about increasing it. Answer: To avert the fiscal cliff, or blunt the tax shock, policy makers must, over the next 12 months, do the unthinkable by widening the deficit, not narrowing it. But plans should also be put in place over the long run to phase in a narrowing of deficits that keep adding to a federal debt that now stands at 70% of nominal GDP, a level not seen since shortly after World War II.

Cynics about the political process could make a fair case for a very different course of action. Our leaders are being told to be fiscally conservative over the long run and fiscally profligate over the short run. What if, given their profligate nature, they heed the second admonition, but ignore the first? If that were likely to happen, there might be a case for accepting the fiscal cliff, and the risks it poses of recession, because the bust that could ultimately occur if deficits are allowed to mount would be far worse.

But there is one key point the cynics should consider. Those concerned about the looming debt generally favor spending reductions over tax increases. And averting tax increases is what averting the fiscal cliff is mainly about.

I have argued that this tax shock is the main threat, since the spending cuts are essentially illusory. The cuts that are supposed to occur via "sequestration" will be more than offset by increases in spending on entitlements. The projections of the CBO and the White House Office of Management and Budget both show spending climbing in 2013.

The agreement forged to handle the fiscal cliff may postpone the sequestration, resulting in even bigger spending increases. But given the arithmetic, most of that agreement will necessarily involve postponing the tax hikes.

THE GRAPHIC AT LEFT, which itemizes the main components of the tax shock, adds up to $506 billion. To put that figure in context, nominal gross domestic product now stands at $15.8 trillion, of which $506 billion is 3.2%, even more than the 2.7% projected by the CBO.

Nominal GDP in the third quarter grew at an annual rate of 5%. So if we take 5% as our baseline, and assume a dollar-for-dollar hit to GDP growth, we would still get nominal gross domestic product running positive, and real GDP running about flat. To get an outright contraction in real GDP growth, we must assume a hit per dollar of more than a buck of GDP -- a shock that's quite possible.

But the building blocks of that tax shock show a way to blunt it. Boehner favors lower taxes for everyone, including the wealthy. Obama wants to sock it to the wealthy and extend tax relief to everyone else.

Accordingly, both favor extending the Bush tax cuts for lower brackets (worth $95 billion), extending the exemption on the alternative minimum tax ($114 billion), and extending part of the estate-tax holiday ($14 billion). And, according to a story in Reuters, support also is building for extending the payroll-tax holiday ($120 billion). Those figures add to $343 billion, or more than two-thirds of the tax shock. Call that shock effectively blunted.

WHAT MIGHT REALLY HAPPEN? Cato Institute Budget Analyst Chris Edwards believes that, before this year's congressional session ends, all parts of the looming fiscal cliff will be officially postponed, at least until the middle of next year. That will include delaying tax hikes on the top brackets, along with the delay of sequestration. The second, more important part of the job -- taming the debt and deficits -- will have to wait until next year.